Senate Approves Key Renewable-Energy Tax Incentives
Source: Dow Jones Newswires, Cassandra Sweet (12/15/10)
"The $858 billion bill moves next to the House of Representatives."
U.S. wind, solar and other renewable energy industries have pressed lawmakers to continue a program that allows solar and wind-power facilities to obtain federal grants equal to a tax credit worth 30% of the cost to build a new facility. The program was established in the 2009 economic stimulus package to rescue the U.S. renewable energy market from near collapse, after lenders that had previously provided financing in return for developers' tax credits abandoned the sector amid the financial crisis.
Developers have warned that U.S. renewable energy development will slow down if the tax-grant program isn't extended, owing to continued weakness in the domestic power market, slow pace of the economic recovery and still-difficult financing environment.
The Solar Energy Industries Association hailed the Senate's tax-bill passage, saying: "The extension will help the solar industry remain one of the fastest-growing industries in America and create thousands of new careers."
The tax bill also includes a one-year extension of a tax credit for the ethanol industry. The program provides a $0.45 subsidy for every gallon of ethanol blended into gasoline.
While the ethanol industry hailed the inclusion, Sen. Dianne Feinstein (D., Calif.) and a coalition of food industry, animal agricultural industry and environmental groups criticized the ethanol tax-credit extension, saying it wasn't necessary for an industry that enjoys other kinds of government support.
"The ethanol industry is the only one to ever receive the triple crown of government intervention," she said after the bill's passed, adding: "Ethanol use is mandated by law, its users receive federal subsidies and domestic production is protected by tariffs. That policy is not sustainable."